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Is Franklin Income A (FKINX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Allocation Balanced funds, a place to start could be Franklin Income A (FKINX - Free Report) . FKINX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FKINX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.

History of Fund/Manager

FKINX is a part of the Franklin Templeton family of funds, a company based out of San Mateo, CA. Franklin Income A debuted in August of 1948. Since then, FKINX has accumulated assets of about $39.71 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 4.16%, and it sits in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.44%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. FKINX's standard deviation over the past three years is 7.19% compared to the category average of 8.72%. Over the past 5 years, the standard deviation of the fund is 8.38% compared to the category average of 8.69%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, FKINX lost 39.13% and underperformed comparable funds by 2.73%. This might suggest that the fund is a worse choice than its peers during a bear market.

Nevertheless, with a 5-year beta of 0.63, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FKINX's 5-year performance has produced a negative alpha of -2.81, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FKINX is a load fund. It has an expense ratio of 0.71% compared to the category average of 0.88%. So, FKINX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Franklin Income A ( FKINX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.

This could just be the start of your research on FKINXin the Allocation Balanced category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.




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